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US elected leaders, and those that work for them, think their constituents are far more conservative than they are. The good news is that this means there is far more support for a progressive political agenda than one might think. The bad news is that without sustained popular activism it is doubtful that elected leaders will change their policies accordingly.

The misinformed views of those running for state office

In August 2012, David E. Broockman and Christopher Skovron, surveyed candidates running for state legislative offices across the US. They asked them their own positions and to estimate their constituents’ positions on same-sex marriage and universal health care. Then, they compared candidate estimates with their constituents’ responses to questions on those issues that were included in a large national survey.

They found that “politicians consistently and substantially overestimated support for conservative positions among their constituents on these issues.” More specifically:

The differences we discover in this regard are exceptionally large among conservative politicians: across both issues we examine, conservative politicians appear to overestimate support for conservative policy views among their constituents by over 20 percentage points on average. In fact, on each of the issues we examine, over 90% of politicians with conservative views appear to overestimate their constituents’ support for conservative policies. . . . Comparable figures for liberal politicians also show a slight conservative bias: in fact, about 70% of liberal officeholders typically underestimate support for liberal positions on these issues among their constituents.

The figure below illustrates their results. Each scatter point represents a different district and shows the candidate estimate of district support for the issue in question and the actual surveyed district support for that issue. Districts where the candidate accurately estimated the district position would be positioned along the linear grey line. As we can see, both the blue line representing liberal politicans and the red line representing conservative ones lie beneath the grey line, showing that district residents are far more favorable to both these two issues then either liberal or conservative politicians think.

Perhaps not surprisingly, when Broockman and Skovron resurveyed the politicians in November, they found that “politicians’ perceptions of public opinion after the campaign and the election itself look identical to their perceptions prior to these events, with little evidence that their misperceptions had been corrected.”

They did another survey in 2014 of the views and perceptions of state legislative candidates and office holders, this time asking about more issues, including ones dealing with gay and lesbian marriage, gun control, the right to abortion, and the legalization of illegal immigrants. Once again they found that:

politicians from both parties believed that support for conservative positions on these issues in their constituencies was much higher than it actually was. These misperceptions are large, pervasive, and robust: Politicians’ right-skewed misperceptions exceed 20 percentage points on issues such as gun control—where these misperceptions are the largest—and persist in states at every level of legislative professionalism, among both candidates and sitting officeholders, among politicians in very competitive districts, and when we compare politicians’ perceptions to voters’ opinions only. That Democratic politicians also overestimate constituency conservatism suggests these misperceptions cannot be attributed to motivated reasoning or social desirability bias alone.

It’s no better at the federal level

Alexander Hertel-Fernandez, Matto Mildenberger and Leah C. Stokes did a similar study on the federal level. In 2016 they surveyed the top legislative staffers of every House and Senate member, asking them to estimate their constituents’ support for repealing Obamacare, regulating carbon dioxide, making a $305 billion investment in infrastructure, mandating universal background checks for firearm purchases, and raising the federal minimum wage to $12 an hour. Then, they compared their estimates to district or state-level survey results.

if we took a group of people who reflected the makeup of America and asked them whether they supported background checks for gun sales, nine out of 10 would say yes. But congressional aides guessed as few as one in 10 citizens in their district or state favored the policy. Shockingly, 92 percent of the staff members we surveyed underestimated support in their district or state for background checks, including all Republican aides and over 85 percent of Democratic aides.

The same is true for the four other issues we looked at . . . . On climate change, the average aide thought only a minority of his or her district wanted action, when in truth a majority supported regulating carbon.

Across the five issues, Democratic staff members tended to be more accurate than Republicans. Democrats guessed about 13 points closer to the truth on average than Republicans.

Below is a visual summary of their results.

The authors also found corporate lobbying to be an important cause of this misrepresentation of public opinion. As Hertel-Fernandez, Mildenberger, and Stokes explain:

Aides who reported meeting with groups representing big business — like the United States Chamber of Commerce or the American Petroleum Institute — were more likely to get their constituents’ opinions wrong compared with staffers who reported meeting with mass membership groups that represented ordinary Americans, like the Sierra Club or labor unions. The same pattern holds for campaign contributions: The more that offices get support from fossil fuel companies over environmental groups, the more they underestimate state- or district-level support for climate action.

And it appears that corporate influence may have more to do with campaign contributions than the quality of corporate arguments. As Eric Levitz, discussing the work in the Intelligencer, points out, “The study . . . found that ‘45 percent of senior legislative staffers report having changed their opinion about legislation after a group gave their Member a campaign contribution’ — and that 62 percent of staffers believe that ‘correspondence from businesses’ are ‘more representative of their constituents’ preferences than correspondence from ordinary constituents.’”

None of this means that we should abandon electoral work. But it does make clear that simply working to elect “good” people, and hoping for the best, will only continue the country’s rightwing drift. There are real forces at work encouraging elected leaders to create their own realities favorable to rightwing positions, including the willingness of conservatives to aggressively and regularly communicate their views to their representatives and, no doubt more importantly, corporate lobbying backed by financial contributions and a careful monitoring of votes.

We can overcome these forces, but only if we build strong popular movements that are able to organize and mobilize people to fight for the things we want, thereby shifting the terms of political debate and the consciousness of politicians in the process. And, back to the good news: the studies above show that popular sentiment is far more receptive to progressive change than we might think from recent election outcomes and government policy.

Many people have given up on the idea of government as an instrument of progressive social change, especially the federal government. They think that the federal government is dominating and distorting economic activity and, more often than not, believe that the cause is a bloated, highly paid, and selfish federal workforce.

In fact, federal programs are increasingly being delivered by private contractors. As a result, private employees doing work for the federal government now outnumber the federal workforce. Moreover, in most cases, they are paid far more than the public employees they replace. And, as more federal work is carried out under the direction of profit-seeking firms, there is good reason to believe that programs are reshaped to ensure that it is the private rather than public interest that is best served.

the federal government workforce has not increased in absolute numbers in half a century. Not only is it the same size now as it was in the 1960s, since the 1980s it has shrunk. There are actually fewer government employees now than there were under Reagan even though the population has grown by over 30%.

As a consequence, as we see below, the size of the federal workforce as a share of the total civilian non-farm workforce has steadily fallen. It is now less than 2 percent of the total.

The growth in private contractors

While the size of federal workforce has remained relatively unchanged for decades, the same is not true for real federal government spending on consumption and investment, as seen in the figure below.

So, how has the federal government been able to boost its activity with a relatively unchanged workforce? The answer is an explosion in the use of private contractors.

This massive third-party workforce has been mostly hidden from public view, kept intentionally out of sight by corporations and their lobbyists who have the most to gain, as well as by elected officials who want to claim that they are not growing government. Moreover, federal corporate contractors operate behind a shield of secrecy, enabled by their de facto exemption from the Freedom of Information Act (FOIA), and ensuring that they can operate without public scrutiny.

Fattening the corporate sector at public expense

This outsourcing of federal activities to private firms is likely an important reason for people’s dissatisfaction with government: they are far more expensive and their goal is profit not service.

A Project on Government Oversight study examined compensation paid to federal and private sector employees, as well as annual billing rates for contractor employees across 35 occupational classifications covering over 550 service activities.

It found, among other things, that:

Federal government employees were less expensive than contractors in 33 of the 35 occupational classifications reviewed.

Private sector compensation was lower than contractor billing rates in all 35 occupational classifications we reviewed.

The federal government approves service contract billing rates—deemed fair and reasonable—that pay contractors 1.83 times more than the government pays federal employees in total compensation, and more than 2 times the total compensation paid in the private sector for comparable services.

Here are some examples of the compensation bias favoring private contractors:

As bad as it is, this compensation bias is far from the whole story. The fact is that public regulators incur significant costs trying to develop contracts that are supposed to ensure acceptable private contractor outcomes as well as actually monitoring performance. And shortfalls in performance, an all too frequent outcome, require either additional federal expenditures beyond those initially stipulated in the contract or a lowering of public standards.

Moreover, a recent review of “the extensive global empirical evidence on the relative efficiency of the private versus public sectors” found no evidence:

that there is any systematic difference in efficiency between public and private sector companies, either in services which are subject to outsourcing, such as waste management, or in sectors privatized by sale, such as telecoms. . . .

This picture is further confirmed by examination of nine sectors which are most often subject to privatization, outsourcing and PPPs – buses, electricity, healthcare, ports, prisons, rail, telecoms, waste management and water – and the same results hold true in each sector: the evidence does not show any superior efficiency by private companies.

The challenge ahead

A report summarizing the discussions and outcomes of an October 2017 conference titled “Restoring Public Control of Public Goods” began as follows:

Over the past thirty-five years, government in the United States has been vilified and vitiated through a movement designed to de-legitimize government in the eyes of the public, to reduce government’s capacity to operate, and to replace that capacity with private contractors and other forms of privatization. . . .

A citizenry that under-appreciates, or are unaware, of the public goods they receive.

The private sector has been quietly and efficiently winning its war to control and profit from public sector activities. One can only hope that the recent interest in socialism will encourage a renewed popular commitment to work with public sector workers to resist this war on the public and build a new, more accountable, not to mentioned well-financed, public sector.

Strikes continue to be an effective way for teachers to improve their living and working (and by extension student learning) conditions. And, polls show that a strong majority of parents continue to support them.

Popular support for teacher strikes remains strong

The education pollster PDK recently asked adults what they thought about teacher salaries and whether they would support teachers if they struck to improve their conditions. According to PDK,

73% of Americans surveyed in the 2018 PDK poll say they would support public school teachers in their community if they went on strike for higher pay. Even among public school parents — those who would be most directly affected by a strike — 78% say they’d support a teacher walkout.

This strong public support was certainly visible during the spring public teacher strikes in West Virginia, Oklahoma, and Arizona. And it continues this fall. For example, teacher strikes delayed the start of the new school year for thousands of students in Washington state. As Don McIntosh reports in the Northwest Labor Press:

As many as 5,000 teachers went out on strike the week before Labor Day at seven Southwest Washington school districts — districts where school superintendents tried to hold on to funds the Legislature had granted for long-overdue teacher raises. In each case, strikes were authorized by overwhelming majorities — from 93 percent to as high as 98.4 percent. The strikes resulted in the complete closure of whole school districts, postponing the school year’s start for over 60,000 students.

Highlighting public support for Evergreen High School teachers, McIntosh writes:

All day long, passing motorists honked their support, and parents, students and members of the community dropped by bringing water and snacks. Some parents handed out strips of paper with a message: “We love you and support you! Thank you for taking the time to show us what it means to stand up for yourself even when it is difficult.”

“Kids and parents and dogs, everybody’s walking the line with us,” [Evergreen Education Association president] Beville said. “Among all the things that we expected when we went on strike, the most unexpected was the overwhelming support we’re getting from the community. Even on Facebook, when people post negative messages, parents are jumping on them like piranhas.”

Washington teachers ended their strikes with sizeable wage increases in five districts, but remain out in two others. School officials in Tumwater in Thurston County and Longview in Cowlitz County filed injunctions in an attempt to force teachers back to work. County judges in both districts declared the strikes illegal, but significantly refused to impose any penalties; the strikes continue.

Teacher pay is too low

While right-wing politicians like to portray public school teachers as a “labor aristocracy,” profiting at the expense of ordinary workers, the fact is that teachers have suffered real wage declines. A case in point: average teacher pay in Washington state fell 8 percent in real (inflation-adjusted) dollars over the last 16 years according to figures from the U.S. Education Department.

American teachers are getting paid less – even though they are better qualified than ever, new research has found.

Teacher salaries are down by nearly 5% compared with before the Great Recession – and it’s not because teachers are younger or less educated, according to the Brown Center on Education Policy at the Brookings Institution.

In fact, the opposite is true.

And, as the following figure shows, not only has teacher pay fallen over the last seven years, the gap in earnings relative to other college educated workers has significantly grown.

In fact, an Economic Policy Institute study determined, as shown below, that there is no state in which public school teachers are paid more than college graduates.

The teacher wage penalty has dramatically grown, even when wages are adjusted for “education, experience, and other factors known to affect earnings.” More specifically the Economic Policy Institute study found that the regression-adjusted wage gap for all public sector teachers grew from 1.8 percent in 1994, to 4.3 percent in 1996, and reached a record 18.7 percent in 2017.

Challenges ahead

Teacher strikes have been fueled by a number of factors in addition to the wage declines highlighted above, including new testing mandates which crowd out instruction and planning time, and cuts in education budgets which have left teachers with outdated materials and overcrowded classrooms. The recent Janus decision and the efforts of the rightwing State Policy Network to weaken public sector unions makes clear that the teacher movement cannot stand still if it hopes to maintain if not actually build on its recent gains. Public school teachers will have to strengthen their unions and deepen their community ties, and in concert with other public sector workers, build a campaign that makes clear the importance of a well-funded and accountable public sector and the need for new progressive tax measures to raise the required funds.

Obviously, this is no simple task. It is not just a rightwing fringe that opposes public sector unions and raising taxes to ensure a healthy public sector that meets community needs. For example, as the Interceptreports:

State Policy Network member think tanks generally do not disclose their donors. Several are generously funded by foundations controlled by billionaire brothers David and Charles Koch. The Texas Public Policy Foundation, the State Policy Network affiliate in Texas, inadvertently revealed its donor list several years ago. The donor list included foundation grants from the Koch Industries, AT&T, Verizon, Altia, Geo Group, Exxon Mobil, Coca-Cola, Blue Cross Blue Shield of Texas, and the Claude Lambe Charitable Foundation, a nonprofit controlled by the Kochs, among others.

In short, we are engaged in a real class struggle and that understanding has to be built into our organizing from the very beginning.

Republicans and Democrats like to claim that they are on opposite sides of important issues. Of course, depending on which way the wind blows, they sometimes change sides, like over support for free trade and federal deficits. Tragically, however, there is no division when it comes to militarism.

For example, the federal budget for fiscal year 2018 (which ends on September 30, 2018), included more money for the military than even President Trump requested. Trump had asked for a military budget of $603 billion, a sizeable $25 billion increase over fiscal year 2017 levels; Congress approved $629 billion. Trump had also asked for $65 billion to finance current war fighting, a bump of $5 billion; Congress approved $71 billion. The National Defense Authorization Act of 2018, which set the target budget for the Department of Defense at this high level, was approved by the Senate in a September 2017 vote of 89-9.

In the words of the New York Times: “In a rare act of bipartisanship on Capitol Hill, the Senate passed a $700 billion defense policy bill . . . that sets forth a muscular vision of America as a global power, with a Pentagon budget that far exceeds what President Trump has asked for.”

That Act also called for a further increase in military spending of $16 billion for fiscal year 2019 (which begins October 1, 2018). And, in June 2018, the Senate voted 85 to 10 to authorize that increase, boosting the Defense Department’s fiscal year 2019 total to $716 billion.

This bipartisan embrace of militarism comes at enormous cost for working people. This cost includes cuts in funding for public housing, health care and education; the rebuilding of our infrastructure; basic research and development; and efforts to mitigate climate change. It also includes the militarization of our police, since the military happily transfers its excess or outdated equipment to willing local police departments.

And it also includes a belligerent foreign policy. A case in point: Congress has made clear its opposition to the Trump administration decision to meet with North Korean leader Kim Jong-un and halt war games directed against North Korea, apparently preferring the possibility of a new Korean War. Congress is also trying to pass a law that will restrict the ability of the President to reduce the number of US troops stationed in South Korea.

In brief, the US military industrial complex, including the bipartisan consensus which helps to promote militarism’s popular legitimacy, is one of the most important and powerful foes we must overcome if we are to seriously tackle our ever-growing social, economic, and ecological problems.

The military is everywhere

The US has approximately 800 formal military bases in 80 countries, with 135,000 soldiers stationed around the globe. Putting this in perspective, Alice Slater reports that:

only 11 other countries have bases in foreign countries, some 70 altogether. Russia has an estimated 26 to 40 in nine countries, mostly former Soviet Republics, as well as in Syria and Vietnam; the UK, France, and Turkey have four to 10 bases each; and an estimated one to three foreign bases are occupied by India, China, Japan, South Korea, Germany, Italy, and the Netherlands.

US special forces are deployed in even more countries. According to Nick Turse, as of 2015, these forces were operating in 135 countries, an 80 percent increase over the previous five years. “That’s roughly 70 percent of the countries on the planet. Every day, in fact, America’s most elite troops are carrying out missions in 80 to 90 nations practicing night raids or sometimes conducting them for real, engaging in sniper training or sometimes actually gunning down enemies from afar.”

This widespread geographic deployment represents not only an aggressive projection of US elite interests, it also provides a convenient rationale for those that want to keep the money flowing. The military, and those that support its funding, always complain that the military needs more funds to carry out its mission. Of course, the additional funds enable the military to expand the reach of its operations, thereby justifying another demand for yet more money.

The US military is well funded

It is no simple matter to estimate of how much we spend on military related activities. The base military budget is the starting point. It represents the amount of the discretionary federal budget that is allocated to the Department of Defense. Then there is the overseas contingency operations fund, which is a separate pool of money sitting outside any budgetary restrictions, that the military receives yearly from the Congress to cover the costs of its ongoing warfare.

It is the combination of the two that most analysts cite when talking about the size of the military budget. Using this combined measure, the Stockholm International Peace Research Institute finds that the United States spends more on its military than the next seven largest military spenders combined, which are China, Russia, Saudi Arabia, India, France, the UK, and Japan.

As the following chart shows, US military spending (base budget plus overseas contingency operations fund), adjusted for inflation, has been on the rise for some time, and is now higher than at any time other than during the height of the Iraq war. Jeff Stein, writing in the Washington Post, reports that the military’s base budget will likely be “the biggest in recent American history since at least the 1970s, adjusting for inflation.”

As big as it is, the above measure of military spending grossly understates the total. As JP Sottile explains:

The Project on Government Oversight (POGO) tabulated all “defense-related spending” for both 2017 and 2018, and it hit nearly $1.1 trillion for each of the two years. The “defense-related” part is important because the annual National Defense Authorization Act, a.k.a. the defense budget, doesn’t fully account for all the various forms of national security spending that gets peppered around a half-dozen agencies.

William Hartung, an expert on military spending, went agency by agency to expose all the various military-related expenses that are hidden in different parts of the budget. As he points out:

You might think that the most powerful weapons in the U.S. arsenal — nuclear warheads — would be paid for out of the Pentagon budget. And you would, of course, be wrong. The cost of researching, developing, maintaining, and “modernizing” the American arsenal of 6,800 nuclear warheads falls to an obscure agency located inside the Department of Energy, the National Nuclear Security Administration, or NNSA. It also works on naval nuclear reactors, pays for the environmental cleanup of nuclear weapons facilities, and funds the nation’s three nuclear weapons laboratories, at a total annual cost of more than $20 billion per year.

Hartung’s grand total, which includes, among other things, the costs of Homeland Security, foreign military aid, intelligence services, the Veterans Administration, and the interest on the debt generated by past spending on the military, is $1.09 trillion, roughly the same as the POGO total cited above. In short, our political leaders are far from forthcoming about the true size of our military spending.

Adding insult to injury, the military cannot account for how it spends a significant share of the funds it is given. A Reuters’ article by Scott Paltrow tells the story:

The United States Army’s finances are so jumbled it had to make trillions of dollars of improper accounting adjustments to create an illusion that its books are balanced.

The Defense Department’s Inspector General, in a June [2016] report, said the Army made $2.8 trillion in wrongful adjustments to accounting entries in one quarter alone in 2015, and $6.5 trillion for the year. Yet the Army lacked receipts and invoices to support those numbers or simply made them up.

As a result, the Army’s financial statements for 2015 were “materially misstated,” the report concluded. The “forced” adjustments rendered the statements useless because “DoD and Army managers could not rely on the data in their accounting systems when making management and resource decisions.” . . .

The report affirms a 2013 Reuters series revealing how the Defense Department falsified accounting on a large scale as it scrambled to close its books. As a result, there has been no way to know how the Defense Department – far and away the biggest chunk of Congress’ annual budget – spends the public’s money.

The new report focused on the Army’s General Fund, the bigger of its two main accounts, with assets of $282.6 billion in 2015. The Army lost or didn’t keep required data, and much of the data it had was inaccurate, the IG said.

“Where is the money going? Nobody knows,” said Franklin Spinney, a retired military analyst for the Pentagon and critic of Defense Department planning. . . .

For years, the Inspector General – the Defense Department’s official auditor – has inserted a disclaimer on all military annual reports. The accounting is so unreliable that “the basic financial statements may have undetected misstatements that are both material and pervasive.”

Military spending is big for business

Almost half of the US military budget goes to private military contractors. These military contracts are the lifeblood for many of the largest corporations in America. Lockheed Martin and Boeing rank one and two on the list of companies that get the most money from the government. In 2017 Lockheed Martin reported $51 billion in sales, with $35.2 billion coming from the government. Boeing got $26.5 billion. The next three in line are Raytheon, General Dynamics, and Northrop Grumman. These top five firms captured some $100 billion in Pentagon contracts in 2016.

The Pentagon buys more than just weapons. Health care companies like Humana ($3.6 billion), United Health Group ($2.9 billion), and Health Net ($2.6 billion) cash in as well, and they’re joined by, among others, pharmaceutical companies like McKesson ($2.7 billion) and universities deeply involved in military-industrial complex research like MIT ($1 billion) and Johns Hopkins ($902 million).

Not surprisingly, given how lucrative these contracts are, private contractors work hard to ensure the generosity of Congress. In 2017, for example, 208 defense companies spent almost $100 million to deploy 728 reported lobbyists. Lobbying is made far easier by the fact that more than 80 percent of top Pentagon officials have worked for the defense industry at some point in their careers, and many will go back to work in the defense industry.

Then there are arms sales to foreign governments. Lawrence Wittner cites a study by the Stockholm International Peace Research Institute that found that sales of weapons and military services by the world’s largest 100 corporate military suppliers totaled $375 billion in 2016. “U.S. corporations increased their share of that total to almost 58 percent, supplying weapons to at least 100 nations around the world.”

Eager to promote the arms industry, government officials work hard on their behalf. As Hartung explains: From the president on his trips abroad to visit allied world leaders to the secretaries of state and defense to the staffs of U.S. embassies, American officials regularly act as salespeople for the arms firms.”

More for the military and less for everything else

The federal budget is divided into three categories: mandatory spending (primarily social security and medicare), discretionary spending, and interest on the debt. Two trends in discretionary spending, the component of the budget set each year at the discretion of Congress, offer a window on how militarism is squeezing out funding for programs that serve majority needs.

The first noteworthy trend is the growing Congressional support for defense (base military budget) over non-defense programs. In 2001, the majority of discretionary funds went to non-defense programs, However, that soon changed, as we see in the chart below, thanks to the “war on terror.” In the decade following September 11, 2001, military spending increased by 50 percent, while spending on every other government program increased by only 13.5 percent.

In the 2018 federal budget, 54 percent of discretionary funds are allocated to the military (narrowly defined), $700 billion to the military and $591 billion to non-military programs. The chart below shows President Trump’s discretionary budgetary request for fiscal year 2019. As we can see, the share of funds for the military would rise to 61 percent of the total.

According to the National Priorities Project, “President Trump’s proposals for future spending, if accepted by Congress, would ensure that, by 2023, the proportion of military spending [in the discretionary budget] would soar to 65 percent.” Of course, militarism’s actual share is much greater, since the military is being defined quite narrowly. For example, Veterans’ Benefits is included in the non-defense category.

The second revealing trend is the decline in non-defense discretionary spending relative to GDP. Thus, not only is the military base budget growing more rapidly than the budget for nondefense programs, spending on discretionary non-defense programs is not even keeping up with the growth in the economy. This trend translates into a declining public capacity to support research and development and infrastructure modernization, as well as meet growing needs for housing, education, health and safety, disaster response . . . the list is long.

The 2018 bipartisan budget deal increased discretionary spending for both defense and non-defense programs, but the deal did little to reverse this long run decline in non-defense discretionary spending relative to the size of the economy. A Progressive Policy Institute blog post by Ben Ritz explains:

The Budget Control Act of 2011 (BCA) capped both categories of discretionary spending as part of a broader effort to reduce future deficits. When Congress failed to reach a bipartisan agreement on taxes and other categories of federal spending, the BCA automatically triggered an even deeper, across-the-board cut to discretionary spending known as sequestration. While the sequester has been lifted several times since it first took effect, discretionary spending consistently remained far below the original BCA caps.

That trend ended with the Bipartisan Budget Act of 2018 (BBA). This budget deal not only lifted discretionary spending above sequester levels – it also went above and beyond the original BCA caps for two years. Nevertheless, projected domestic discretionary spending for Fiscal Year 2019 is significantly below the historical average as a percentage of gross domestic product. Moreover, even if policymakers extended these policy changes beyond the two years covered by the BBA, we project that domestic discretionary spending could fall to just 3 percent of GDP within the next decade – the lowest level in modern history [see dashed black line in chart below].

The story is similar for defense spending. Thanks to the pressure put on by the sequester, defense discretionary spending fell to just under 3.1 percent of GDP in FY2017. Under the BBA, defense spending would increase to 3.4 percent of GDP in FY2019 before falling again [see dashed black line in following chart]. Unlike domestic discretionary spending, however, defense would remain above the all-time low it reached before the 2001 terrorist attacks throughout the next decade.

In sum, Congress appears determined to squeeze non-defense programs, increasingly privileging defense over non-defense spending in the discretionary budget and allowing non-defense spending as a share of GDP to fall to record lows. The ratio of discretionary defense spending relative to GDP appears to be stabilizing, although at levels below its long-term average. However, discretionary defense spending refers only to the base budget of the Department of Defense and as such is a seriously understated measure of the costs of US militarism. Including the growing costs of Homeland Security, foreign military aid, intelligence services, the Veterans Administration, the interest on the debt generated by past spending on the military, and the overseas contingency operations fund, would result in a far different picture, one that would leave no doubt about the government’s bipartisan commitment to militarism.

The challenge ahead

Fighting militarism is not easy. Powerful political and business forces have made great strides in converting the United States into a society that celebrates violence, guns, and the military. The chart below highlights one measure of this success. Sadly, 39 percent of Americans polled support increasing our national defense while 46 percent think it is just about right. Only 13 percent think it is stronger than it needs to be.

Polls, of course, just reveal individual responses at a moment in time to questions that, in isolation, often provide respondents with no meaningful context or alternatives and thus reveal little about people’s true thoughts. At the same time, results like this show just how important it is for us to work to create space for community conversations that are informed by accurate information on the extent and aims of US militarism and its enormous political, social, economic, and ecological costs for the great majority of working people.

In most states in the United States, the rich have enjoyed ever lower rates of taxation while working people have suffered from inadequately funded public services. Calls for an end to this situation are more often than not met with statements by state officials and the wealthy themselves that higher taxes on the rich will prove counterproductive; the rich will just move to lower-tax states. In fact, research by the sociologist Christobal Young shows that this is largely an empty threat. The rich rarely move to escape high taxes.

The threat

Oregon offers one example of this threat. In 2009, the Oregon Legislature passed two measures (66 and 67) in an effort to boost funding for education, health and public safety. Measure 66 would raise taxes on high income Oregonians—couples earning over $250,000 a year and individuals earning over $125,000 a year. Measure 67 would raise taxes on profitable corporations.

Opponents of the measures succeeded in placing them on the ballot, hoping that they could scare voters into rejecting them. Almost all major business leaders threatened calamity if they passed. For example, Phil Knight, the CEO of Nike, not only gave $100,000 to the anti-measures campaign, he also wrote an article published in the Oregonian newspaper in which he said:

Measures 66 and 67 should be labeled Oregon’s Assisted Suicide Law II.

They will allow us to watch a state slowly killing itself.

They are anti-business, anti-success, anti-inspirational, anti-humanitarian, and most ironically, in the long run, they will deprive the state of tax revenue, not increase it. . . .

Reputable economists forecast 66 and 67 will cost the state thousands — maybe tens of thousands — of jobs, and that thousands of our most successful residents will leave the state.

Knight ended his letter with his own threat to leave the state if the measures passed. However, voters approved both measures, and Nike and Phil Knight remain in Oregon.

As California considered similar taxes [to Oregon], policymakers cautioned “nothing is more mobile than a millionaire and his money”. In New Jersey, governor Chris Christie simply stated: “Ladies and Gentlemen, if you tax them, they will leave.”

The reality

Young studied tax return data, which shows where people live, for every million-dollar earner in the United States over the years 1999 to 2011. His data set included “3.7 million top-earning individuals, who collectively filed more than 45 million tax returns.”

What he found was that the migration rate of millionaires was relatively low, with only 2.4 percent of millionaires changing their state residence in a given year. Perhaps not surprisingly, as we see below, poorer people tend to move from one state to another more often than do millionaires.

Young does note that “When millionaires do move, they admittedly tend to favor lower-tax states over higher-tax ones – but only marginally so. Around 15 percent of interstate millionaire migrations bring a net tax advantage. The other 85 percent have no net tax impact for the movers.”

Moreover, almost all the movement by millionaires to lower-tax states is accounted for by moves to just one state, Florida. Other low-tax states, like Texas, were not net-recipients of millionaires fleeing high-tax states. In short there is no real evidence that millionaires systematically move from high-tax states to low-tax states.

Young believes that one major reason for the lack of migration by the rich is that “migration is a young person’s game.” As the figure below shows, people tend to move for education and early in their careers. Thus:

By the time people hit their early forties, PhDs, college grads and high school drop-outs all show the same low rate of migration. Typically, millionaires are society’s highly educated at an advanced career stage. They are typically the late-career working rich: established professionals in management, finance, consulting, medicine, law and similar fields. And they have low migration because they are both socially and economically embedded in place.

The global story

Young finds the global story is much the same. He examined the 2010 Forbes list of world’s billionaires and found that approximately 85 percent still lived in their country of birth. Moreover, as he explains:

among those who do live abroad, most moved to their current country of residence long before they became wealthy – either as children with their parents, or as students going abroad to study (and then staying). . . . Only about 5% of world billionaires moved abroad after they became successful.

The take-away

The rich have both increased their share of income and reduced their share of state taxes over the last decades. This has left most states unable to provide the critical public services working people need. Young’s study demonstrates that we should not allow fears of “rich flight” to keep us from building “tax the rich movements” across the United States.

These are supposed to be the good times—with our current economic expansion poised to set a record as the longest in US history. Yet, according to the Federal Reserve’s Report on the Economic Well-Being of US Households in 2017, forty percent of American adults don’t have enough savings to cover a $400 emergency expense such as an unexpected medical bill, car problem or home repair.

The problem with our economy isn’t that it sometimes hits a rough patch. It’s that people struggle even when it is setting records.

The expansion is running out of steam

Our current economic expansion has already gone 107 months. Only one expansion has lasted longer: the expansion from March 1991 to March 2001 which lasted 120 months.

A CNBC Market Insider report by Patti Domm quotes Goldman Sachs economists as saying: “The likelihood that the expansion will break the prior record is consistent with our long-standing view that the combination of a deep recession and an initially slow recovery has set us up for an unusually long cycle.”

The Goldman Sachs model, according to Domm:

shows an increased 31 percent chance for a U.S. recession in the next nine quarters. That number is rising. But it’s a good news, bad news story, and the good news is there is now a two-thirds chance that the recovery will be the longest on record. . . . The Goldman economists also say the medium-term risk of a recession is rising, “mainly because the economy is at full employment and still growing above trend.”

The chart below highlights the growing recession risk based on a Goldman Sachs model that looks at “lagged GDP growth, the slope of the yield curve, equity price changes, house price changes, the output gap, the private debt/GDP ratio, and economic policy uncertainty.”

Sooner or later, the so-called good times are coming to an end. Tragically, a large percent of Americans are still struggling at a time when our “economy is at full employment and still growing above trend.” That raises the question: what’s going to happen to them and millions of others when the economy actually turns down?

Living on the edge

The Federal Reserve’s report was based on interviews with a sample of over 12,000 people that was “designed to be representative of adults ages 18 and older living in the United States.” One part of the survey dealt with unexpected expenses. Here is what the report found:

Approximately four in 10 adults, if faced with an unexpected expense of $400, would either not be able to cover it or would cover it by selling something or borrowing money. The following figure shows that the share of Americans facing financial insecurity has been falling, but it is still alarming that the percentage remains so high this late in a record setting expansion.

Strikingly, the Federal Reserve survey also found, as shown in the table below, that “(e)ven without an unexpected expense, 22 percent of adults expected to forgo payment on some of their bills in the month of the survey. Most frequently, this involves not paying, or making a partial payment on, a credit card bill.”

And, as illustrated in the figure below, twenty-seven percent of adult Americans skipped necessary medical care in 2017 because they were unable to afford its cost. The table that follows shows that “dental care was the most frequently skipped treatment, followed by visiting a doctor and taking prescription medicines.”

Clearly, we need more and better jobs and a stronger social safety net. Achieving those will require movement building. Needed first steps include helping those struggling see that their situation is not unique, a consequence of some individual failing, but rather is the result of the workings of a highly exploitative system that suffers from ever stronger stagnation tendencies. And this requires creating opportunities for people to share experiences and develop their will and capacity to fight for change. In this regard, there may be much to learn from the operation of the Councils of the Unemployed during the 1930s.

It also requires creating opportunities for struggle. Toward that end we need to help activists build connections between ongoing labor and community struggles, such as the ones that education and health care workers are making as they fight for improved conditions of employment and progressive tax measures to fund a needed expansion of public services. This is the time, before the next downturn, to lay the groundwork for a powerful movement for social transformation.

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This post was updated May 31, 2018. The original post misstated the length of the current expansion.

No doubt about it, the recently passed tax bill is terrible for working people. But as Lance Taylor states in a blog post titled “Why Stopping Tax ‘Reform’ Won’t Stop Inequality”: “Inequality isn’t driven by taxes—its driven by the power of capital in relation to workers.” Said differently we need to concentrate our efforts on shifting the balance of class power. And that means, among other things, putting more of our energy into workplace organizing and revitalizing the trade union movement.

The rich really are different

Taylor uses the Palma ratio to highlight the growth of income inequality. The measure, proposed by the Cambridge University economist Jose Gabriel Palma, is defined as the ratio of the average income of a wealthy group relative to the average income of a poorer group. Taylor calculates Palma ratios “for the top one percent vs. households between the 61st and 99th percentiles of the size distribution (the ‘middle class’) and the sixty percent at the bottom.”

The first figure looks at Palma ratios for pre-tax income. The second figure uses disposable or after-tax income.

In both figures we see growing ratios, which means that the top 1 percent is increasing its income faster than the other two groups, although the gains are not quite as large in the case of after-tax income, suggesting that taxes and transfers do make a small but real difference.

Be that as it may, the ratio of the top group’s after-tax income relative to Taylor’s middle group grew 3.85 percent per year over the period 1986 to 2014, while the ratio with the bottom group grew 3.54 percent a year. As Taylor comments, “Such rising inequality is unprecedented. These rates are a full percentage point higher than output growth, and are not sustainable in the long run.”

What is also noteworthy is that the Palma growth rates for both the middle and bottom groups are quite close. This is important because it shows that inequality is largely driven by the top earners pulling income from the rest of the population, rather than a widening income gap between Taylor’s middle and bottom groups.

An IMF study of the relationship between income inequality and labor market institutions in twenty developed capitalist countries over the period 1980 to 2011 came to a similar conclusion, although it focused on the top 10 percent rather than the top 1 percent. As Florence Jaumotte and Carolina Osorio Buitro, the authors of the study, explain (and illustrate in the figure below):

As with measures of income inequality, changes in the distribution of earnings indicate that inequality has risen owing largely to a concentration of earnings at the top of the distribution. Gross earnings differentials between the 9th and 5th deciles of the distribution have increased over four times as much as the differential between the 5th and 1st deciles. Moreover, data from the Luxembourg Income Survey on net income shares indicate that income shares of the top 10 percent earners have increased at the expense of all other income groups. While there is some country heterogeneity, the increase in top income shares since the 1980s appears to be a pervasive phenomenon.

Class power counts

As we can see in the first figure above, rich households, with a mean income of greater than $2 million a year, have “40 times the income of the bottom 60 percent and 13.5 times payments going to the middle class.” In the figure below, Taylor illustrates the source of that income. One way or another, he finds that it comes from capital ownership and profits.

As we can see, labor compensation has grown rapidly over the last few years, and now exceeds $500,000 per year. Still, it represents only roughly nine percent of the total, significantly less than either of the other two main income categories, proprietor’s income and interest and dividends. Proprietor’s income, interest and dividends, and capital gains all flow from ownership. So, in fact, does an important share of labor compensation which includes bonuses and stock options.

As Taylor explains:

Given that the bulk of income of the top one percent comes from profits through one channel or another, the obvious inference is that the rising Palma ratios in Figure 1 were fueled by an ongoing shift away from wages in the “functional” income distribution between labor and capital.

The question is why wages of ordinary households lagged.

After examining patterns and trends in business profits, Taylor concludes that the primary answer lies in the ability of firms to hold down wages. Among the reasons for their success:

Changes in institutional norms (laws, unionization and other of the game) surely played a role. Robert Solow (2015) from MIT, the doyen of mainstream macroeconomics, observes that labor suffered for reasons including “the decay of unions and collective bargaining, the explicit hardening of business attitudes, the popularity of right-to-work laws, and the fact that the wage lag seems to have begun at about the same time as the Reagan presidency all point in the same direction: the share of wages in national value added may have fallen because the social bargaining power of labor has diminished.”

Divide-and-rule in a “fissuring” labor market, as described by David Weil (2014) is one aspect of this process. Globalization, which came to the forefront in the 2016 Presidential election, also played a role.

The IMF study again provides support for this conclusion. A simple correlation test of the relationship between labor market institutions and inequality produced “a strong negative relation between the top 10 percent income share and union density.” Econometric tests that attempted to control for technology, globalization, financialization, tax rates and a host of other variables confirmed the relationship. As the authors explain:

Our benchmark estimates of gross income inequality indicate that the weakening of unions is related to increases in the top 10 percent income share. A 10 percentage point decline in union density is associated with a 5 percent increase in the top 10 percent income share. The relation between union density and the Gini of gross income is also negative and significant.

On average, the decline in union density explains about 40 percent of the 5 percentage point increase in the top 10 percent income share . . . . By contrast, the decline in unionization contributes more modestly to the rise of the gross income Gini, reflecting the somewhat weaker relation between these variables. However, about half of the increase in the Gini of net income is explained by the decline in union density, evidencing the additional and statistically significant relation between this institution and redistribution. The decline in union density was a widespread phenomenon which, as our estimation results suggest, could be an important contributing factor to the rise in top income shares.

The takeaway

Taylor doesn’t minimize the significance of the ongoing tax changes. But as he states:

it took 30 or 40 years for the present distributional mess to emerge. It may well take a similar span of time to clean it up. Progressive tax changes of $100 billion here or $50 billion there are not going to impact overall inequality. The same is true of once-off interventions such as raising the minimum wage by a few dollars per hour.

Long-term improvement requires changes to the present situation that can cumulate over time.

And that requires rebuilding labor’s strength so as to secure meaningful wage increases and a transformation in economic institutions and dynamics. As the IMF study makes clear, fighting for strong unions must be an important part of the process.